Debtors’ Management Practices and Resilience of Small and Medium Enterprises in South Africa
Abstract
Abstract Aim: This research aimed to assess the relationship between debtors’ management practices and the resilience of small and medium-sized enterprises in South Africa. Methods: Employing a quantitative research design, the study employed purposive sampling to select a cohort of 110 SME owners operating in Durban, South Africa. 94% response rate was achieved, yielding 103 valid responses. Results: The results of the analysis unveiled a statistically significant positive correlation between effective debt management and the resilience of SMEs. This empirical evidence signifies that proficient debtors' management plays a pivotal role in enhancing the resilience of SMEs operating in South Africa. Conclusion: This study suggests that SMEs employ both liberal and severe debtor debtors’ management practices. SMEs should develop robust systems for monitoring customers' debtors and credit scores. Regular assessment and verification of creditworthiness are essential steps before extending credit or entering debtor relationships. Contribution: This study contributes to the growing body of knowledge by affirming the positive influence of debtors' management on the resilience of SMEs in South Africa. Drawing on the findings of this study, government agencies and industry associations should collaborate to develop supportive initiatives and policies that aid SMEs in optimizing their debt management strategies.
Copyright (c) 2024 Thabiso Sthembiso Msomi, Reon Matemane, Sphesihle Charles Zungu Zungu
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